U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.

Litigation Release No. 19495 / December 16, 2005

On December 14, 2005, the Securities and Exchange Commission filed an action in Fort Worth federal district court to enforce subpoenas issued to attorneys David Chesnoff and Chaka Henry of the Las Vegas firm Goodman & Chesnoff, P.C. The Commission alleges that Henry, on behalf of Goodman firm client Doyle Brunson, prepared and delivered an unsolicited offer to buy WPT Enterprises, Inc., the publicly traded owner of the World Poker Tour, at a high premium over its then-market value. Shortly thereafter, the Commission contends, a public relations firm Brunson hired, and a website he endorses, announced the offer publicly. The Commission asserts that publication of this offer, widely covered in the media, triggered a steep rise in WPT's stock price on record trading volume.

As the Commission alleges, however, the Goodman firm and Brunson immediately stopped responding to WPT's requests for information about the offer. Instead, shortly after delivering the offer, the Goodman firm, at Chesnoff's instruction, abruptly withdrew from the engagement. When WPT publicly disclosed Brunson and his law firm's unresponsiveness, its stock price sharply declined, costing investors tens of millions of dollars in lost market value. Brunson's offer eventually expired by its terms.

The Commission is formally investigating whether Brunson's offer and its publication violated federal securities laws, including the antifraud provisions of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934. As part of its investigation, the Commission's staff subpoenaed documents and testimony from Chesnoff and Henry. However, Brunson, who has invoked his Fifth Amendment right against self-incrimination and declined to testify in the investigation, directed the Goodman attorneys to withhold certain documents and not to testify on critical aspects of the offer, under the attorney-client privilege and work product doctrine. The Commission's subpoena enforcement action seeks to set aside these privileges on various legal grounds, including the crime-fraud exception, and to compel Chesnoff and Henry to provide the requested documents and testimony. The court has not yet set the Commission's action for hearing.